Bank of America hiring spree boosts asset unit

Where do you put the people when you increase your staff by 60% in two years?

That’s the challenge faced by Banc of America Capital Management, which added 140 staff members last year and plans to hire 200 more this year, for a total head count of 900.

The unit, which has headquarters in both St. Louis and Charlotte, N.C., was created 18 months ago to integrate under co-chairmen Michael E. Kenneally and Robert H. Gordon the various investment management businesses accumulated by Bank of America Corp.

Assets under management were $290 billion at yearend 2000, up from $258 billion as of Dec. 31, 1999.

But the new unit’s aggressive global expansion plans require more people than were brought together by the combination of BofA’s TradeStreet Investment Associates Inc., Sovran Capital Management Corp. and Boatmen’s Capital Management Inc.

“We had a huge investment management and distribution unit, but it wasn’t as efficient or client focused as it needed to be,” says Mr. Gordon, who works out of the unit’s Charlotte office.

More than half the staff members hired in 2000 were involved in asset management, with 25 portfolio managers added to institutional investment management teams and 15 to private-bank management teams.

Portfolio managers primarily were put to work beefing up the unit’s quantitative and growth equity strategies.

New research analysis personnel totaled 30, and five traders were hired. The balance of the new hires of 2000 have roles in marketing, client service and administrative support.

High profile

High-profile staff additions from the 2000 crop were Steve Young, brought in as director of asset allocation and senior market strategist, and Dan Mulvey, who directs the money market fund management area.

By yearend, the unit will have added 50 more people to the investment management side: 25 analysts and 25 portfolio managers and administrative staff members.

Almost a quarter of the hires for this year will be institutional sales and marketing staff, with about 10 of those people stationed in Europe, Asia and Latin America, Mr. Gordon says.

A good proportion of the new marketers will support Banc of America’s joint venture with Diversified Investment Advisors of Purchase, N.Y., in the midsize 401(k) plan market.

Most of the newcomers have been housed in existing space in the unit’s offices in St. Louis and Charlotte, where this year’s staff additions also are likely to be employed.

Even after adding so many people in 2001, Mr. Gordon says he will need to add even more investment capability, especially in value equities and alternative investments.

The latter are in high demand for use in institutional balanced portfolios, as well as by institutional, wealthy and retail investors.

Banc of America now offers two hedge funds of its own and a third through subsidiary Marsico Capital Management Inc. in Denver, and it has a modest private equity business.

But rather than count on a mass hiring of hedge fund, private equity and venture capital fund managers, Mr. Gordon did not rule out growth in the alternatives area by acquisition or joint venture.

As for now, he is luring investment management staff to comparatively off-the-beaten-path offices in Charlotte and St. Louis.

In the midst of the industry’s intense war for talent, Mr. Gordon would say only that compensation packages are “competitive and in line with the rest of the industry.”

But presumably, it takes more than a promise of a ride up the Gateway Arch to persuade portfolio managers to move to St. Louis.